The hotel operator took a massive hit behind closed borders.
Far East Orchard, the hospitality arm of property developer Far East Organization, recorded a loss of $8.9 m for the full year of 2020. This is 94% lower than the $25.8m profit recorded 2019.
Singapore closed its borders to tourists and short-term visitors in March 2020 to contain the spread of COVID-19. Tourism businesses have been allowed to resume in July 2020. However, entry to the Lion City is currently limited to Singapore citizens, permanent residents, and short-term travellers from select countries, subject to teight restrictions.
Far East Orchard CEO Alan Tang said sentiments on the industry remain fragile, even as Singapore slowly eases its borders.
“Sentiment remains fragile and recent ‘snap lockdowns’ like the one in Melbourne and Perth, Australia have shown how quickly the situation can change. We must remain ever vigilant, and not take anything for granted in our operations. This is particularly important for us, as we are in the business of providing lodging,” Tang said in a statement.
The company also operates in Australia, New Zealand, and Malaysia. It has allowed its properties to be used as government isolation facilities during the pandemic.
Whilst Far East Orchard has maintained that it has sufficient liquidity with a cash balance of $278.4m, it has acknowledged that its financial performance in 2021 will “remain under pressure.”
Shares of Far East Orchard closed at $1.07 per unit Thursday, a mere $0.01 lower than its close the previous day.
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